Implications of the External Debt-servicing Constraint for Public Health Expenditure in Sub-Saharan Africa

The paper explores the implications of the external debt-servicing constraint for public health spending in sub-Saharan Africa (SSA), where the health challenges have been great and debt servicing particularly burdensome. Using 1975-94 5-year panel data for 35 African countries, the study finds that although actual debt servicing has little impact, a binding debt-servicing constraint that reflects the debt burden would shift expenditure away from health. Although increases in external aid and constraints on the government executive tend to divert spending in favour of health, the debt-burden effect is dominant. The paper also uncovers an upward trend in public health spending, a result that appears to contradict the popular belief that the structural adjustment programmes undertaken in many SSA countries as of the 1980s may have reduced government expenditure on health.